fall
Business failure among motor traders posted a 22.3 per cent decline
in 2007 but the trend may be reaching a point of inflection,
according to the latest insolvency figures from Experian, an
information services company.
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The figures for the year showed that 248 motor traders failed
compared with 319 in 2006, the biggest annual drop in failures
since 2002 when Experian started collating this information.
However, the fall in the number of failures in 2007 eased
towards the end of the year when the number of failures fell by 1.4
per cent in the fourth quarter compared with the same period in
2006.
In the first, second and third quarters, failures fell 37.5 per
cent, 30.3 per cent and 18.8 per cent respectively.
Kirk Fletcher, managing director of Experian’s automotive
division said: “The annual figures may indicate an optimistic end
to the year, but this is far from the case and the final quarter
gives a truer picture.
“The fact that the declining rate of business failure dropped off
markedly as the year progressed – to virtually nothing by the final
quarter of the year – suggests that 2008 could see the failure rate
rise again.”
Motor traders had one of the highest placings (14th place) among
all industry sectors in terms of the total number of insolvencies,
Fletcher pointed out.
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By GlobalData “Trading conditions are still tough and many smaller dealers
are struggling. The downturn in insolvencies in 2007 could simply
be highlighting the increasing trend of larger dealers merging with
the smaller dealers that are struggling to remain in business,” he
added.
